Key Takeaways
- First-quarter adjusted earnings per share hit $0.32, falling short of the anticipated $0.37 by five cents
- Total revenue declined 7.7% from the previous year to $478.6 million, missing the $485 million projection
- North American comparable sales decreased 6.4%, while international markets grew 3.6%
- CEO Todd Penegor attributed weakness to cost-conscious diners ordering smaller pizzas and fewer add-ons
- Shares of PZZA declined approximately 4.7% to $32.21 Thursday morning, compounding a roughly 20% year-to-date loss
Papa John’s started Thursday facing investor disappointment after delivering underwhelming first-quarter financial results.
The stock retreated approximately 4.7% to $32.21 in early trading, compounding its year-to-date losses which now total nearly 20% since the start of January.
The pizza chain reported adjusted earnings of $0.32 per share for the first quarter of fiscal 2026, falling short of the Street’s consensus estimate of $0.37. Total revenue registered at $478.6 million, representing a 7.7% year-over-year decrease and trailing analyst projections of approximately $485 million.
Papa John’s International, Inc., PZZA
Net income contracted to $7 million compared to $9 million in the same period last year. Adjusted EBITDA totaled $48 million, declining from $50 million in the year-ago quarter.
CEO Todd Penegor attributed the softer performance to inflation-pressured consumers making budget-conscious decisions. Diners are gravitating toward smaller-sized pizzas and forgoing side items and desserts, creating downward pressure on average transaction values.
Domestic Weakness Contrasts With International Momentum
North American comparable sales contracted 6.4% during the quarter. Penegor noted the figure aligned with the company’s internal projections.
International operations painted a brighter picture. Comparable sales outside North America climbed 3.6%, representing the sixth consecutive quarter of positive international same-store sales growth.
Global system-wide restaurant sales totaled $1.20 billion, declining 3% compared to the prior year.
The chain opened 28 new locations during the quarter — eight in North America and 20 in international markets.
A portion of the domestic revenue contraction stemmed from strategic refranchising efforts. Papa John’s refranchised 85 restaurants in the fourth quarter of 2025, eliminating approximately $25 million from domestic company-owned restaurant revenue.
Transformation Strategy Underway
Papa John’s is navigating a comprehensive organizational overhaul. The chain is shuttering hundreds of underperforming domestic locations, streamlining its menu offerings, and reducing corporate workforce.
Penegor emphasized the company’s continued commitment to enhancing value perception and driving innovation to attract new customers while encouraging additional purchases.
Recent product launches — including pan-style pizzas and oven-toasted sandwich options — have demonstrated promising early results during the current year.
The organization is also pursuing additional cost reductions through supply-chain optimization and operational efficiency initiatives.
For the full 2026 fiscal year, Papa John’s reaffirmed its previously issued guidance. The company anticipates global system-wide restaurant sales to remain flat or decline in the low single-digit range.
North American comparable sales are forecast to decrease between 2% and 4%, while international comparable sales are projected to increase 2% to 4%.
Adjusted EBITDA guidance holds steady at $200 million to $210 million, with a midpoint target of $205 million.
The broader pizza category faces mounting headwinds. Pizzerias, previously the second-most prevalent restaurant format across the United States, have now fallen behind both coffee establishments and Mexican food concepts in total unit count.
Domino’s recently lowered its U.S. same-store sales guidance following weaker-than-expected March performance, pointing to intensifying competition and heightened price sensitivity among consumers.
Papa John’s adjusted earnings per share of $0.32 missed the consensus estimate of $0.37, according to FactSet data.
